Commentary on Economics, Information and Human Action

Soon after Energy Secretary Rick Perry requested DOE staff to prepare a report on how public policies affected the electric power grid, lobbyists for the wind energy and solar energy industries struck back. In an op-ed appearing in The Hill, Megan Hansen and I identify why we think the renewable power industries are so sensitive to the inquiry.

Here is a part:

The government has long had a role in the electric power industry, so asking for a survey of its effects should not be controversial.

The reason for the alarm? The request mentioned government mandates and subsidies, which have driven wind and solar energy’s growth, as possible drivers of reliability concerns. The industry lobbyists are right to be sensitive. Despite constantly touting the rapidly falling cost of wind and solar, industry growth over the next decade depends on mandates and subsidies.

[Links in source.]

We agree with wind and solar energy lobbyists that the reliability concerns Perry raises are not a serious issue, and we also agree that Perry’s interest in baseload plants may itself be worrying. Owners of uneconomic baseload plants in Ohio, Illinois, New York and other states have been lobbying heavily for there own subsidies and mandates, and such are not likely to yield benefits to consumers worth the cost of the supports.

The DOE grid study has been delay, with Sec’y Perry suggesting now it will be complete by the end of June and perhaps released to the public in early July.

We end up the op-ed hoping we can agree with wind and solar energy lobbyists on one more thing. I invite you to check out the whole thing.